Which of the following statements about Layer 3 virtualization on a Cisco Nexus 7000 Series switch is true?

A. A VRF represents a Layer 2 addressing domain.
B. Each VRF can belong to multiple VDCs.

C. Each Layer 3 interface is configured in one VRF.

D. Each VDC can be configured with only one VRF.

Explanation:

Each Layer 3 interface on a Cisco Nexus 7000 Series switch can be configured with only one virtual routing and forwarding (VRF) instance. In other words, a Layer 3 interface that has been assigned to a given VRF cannot be simultaneously assigned to another VRF. There are two VRF instances configured on a Nexus 7000 Series switch by default: the management VRF and the default VRF. The management VRF is used only for management, includes only the Mgmt 0 interface, and uses only static routing. The default VRF, on the other hand, includes all Layer 3 interfaces until you assign those interfaces to another VRF.
A VRF instance represents an Open Systems Interconnection (OSI) networking model Layer 3 addressing domain, not a Layer 2 addressing domain. VRFs are used to logically separate OSI networking model Layer 3 networks. The address space, routing process, and forwarding table that are used within a VRF are local to that VRF.
Each VRF on a Cisco Nexus 7000 Series switch can belong to only one virtual device context (VDC). However, each VDC can be configured with multiple VRFs. A VDC is a virtual switch. Therefore, a VDC is a logical representation of a physical device on which VRFs can be configured.

Reference:

Cisco: Routing Overview: Layer 3 Virtualization